atmosphere. all of this is setting the stage. watch out. melissa: so the environmentalists are behind us. i'm not throwing out announcing turkey because of that. that is all the "money" we have for you today. "the willis report" is coming up next. gerri: tonight, wall street seems to think a deal is done. but what i about washington? plus, a look at the most innovative tech gadgets. welcome to "the willis report." ♪ ♪ gerri: hello, everybody, i am gerri willis. forty-two days until the united states jumps off the fiscal cliff. that is if the white house and congress don't get their act together first. that means $600 billion in

across-the-board spending cuts and tax increases, hitting every single american taxpayer right in the wallet. it's not just us but get hit hard, amid all the uncertainty, companies are scaling back their investment plans. according to "the wall street journal", u.s. companies are cutting their spending plans in the fiscal and economic uncertainty, and doing so at the fastest pace in the a recession. it goes on to say that companies are not planning to spend this year or next year. i am joined by jeffrey miron. welcome back to the show, jeffrey. good to see you. i want to start with some breaking news that we had. moody's just announced that they are cutting france's government rating to aa from triple-a. the s&p data back did it back in january. of course, we mentioned last week that the eurozone is in recession.

economies that are expanding and not contracting. is this a winning post for people in this country who can't seem to get our spending under control? >> i think it should be a warning. the entire situation should be a wake-up call. but even in europe, they are not recognized in the wake-up call. they are not doing all they could do to turn themselves away from being someone like greece. they have to cut the spending. gerri: they don't want to hear the bad news. they blared on the front page on "the wall street journal." here's what they say is that overall spending by u.s. companies, down 1.3%. capital spending by 4.4%. the software spending is flat. that was as announced in the third quarter of 2012. the business roundtable saying that sentiments are the worst in

three years. among ceos. this has got to be concerning. a pullback this dramatic by the companies that could expand hiring and improve the overall tone of the general economy by getting more people on the hiring rules. >> i would certainly be concerned. it's related to the fiscal cliff. it's hard to see how the two sides are going to agree to anything sensible because they just have such fundamentally different history government should be doing. the democrats want the government to redistribute income and they want to take from people who have very high incomes and give to other people. the republicans -- they are at least trying to draw attention to the huge base of entitlement spending. pointing out that that is not sustainable have to do something about it. gerri: it is all concerned that the exports are down. we have china and trouble. europe is in trouble.

the u.s. economy is sustaining the planet. >> two of the three major players, at least, the u.s. and europe are majorly concerned with expenditure and death. china doesn't have the same thing. but they are doing all kinds of crazy things in china as well. it is hard to see where any growth is going to come from and anybody will lead the world into a better economic situation. nobody is making the right decision. >> yet, the dow is up 207 points on the idea that there might be a deal in the making. we are starting hear whispers that something could be happening moving forward. i want to know will the market rate the quality of this? will they go up on a fundamentally improve the situation and go down on kicking the can down the road?

>> i think the markets will go up. they will go up as long as something reasonable is done. they will be relieved that at least we kicked the can a year or two. i would be shocked if we agree to anything that addresses the long run of things. gerri: i think you said it best. a reasonable deal, thank you for coming on. it's always a pleasure to see you. >> it is my pleasure. gerri: here's our question tonight. four years from now, do you think america will be better or worse off? la mancha gerriwillis.com. i will share the results of the end of tonight's show. more on the fiscal cliff, i am joined by governor george pataki. the proportion of folks who

think the u.s. will be worse off in four years has doubled in the past four years. does this come as a surprise to you? >> it does not. but i would answer the question very differently. this is the united states. we are still america, we are still a free country. for all the screw ups that we see, we have dealt with it for four years and i think that we can move forward. gerri: maybe we will. i have seen strange government policies come out of republicans and democrats and their administrations. i was mentioning before that there is talk that there is some deal in the works with jeff miron, it might involve another sequestration. so another axle for congress to do something.

big spending cuts if they don't get their act together. is that the answer? >> no, the answer is to face up to the problem now face up to the problem seven or eight years ago, but that hasn't happened. i think the consequences now of inaction are so great. see the volatility, you see the markets, you see people changing their behavior. taking money out, recognizing capital gains. that has a horrible effect on the economy when people making decisions for tax reasons and not economic reasons. when you look at it all, unless we have a washington that is incapable of functioning with a gun to its head, which is essentially where we are right now, we need to feel where we are right now the one we are weeks away from americans having

to pay on average an additional $3500 for the service of the federal government and he is not even in town. >> i am enormously concerned with that. he sits down for a photo op and leaves the country. what bothers me is when he gave his postelection address. he talked about how he had to raise taxes on the so-called rich and we have to raise this amount. but not once did he say that entitlements need to be reformed. we are not going to have to deal with this president not only comes to the realization -- gerri: the president says all the time, he controls the white house and the senate. can't he do what he wants? >> he can't solve that. the house has to act.

he can allow sequestration to occur, and the tax increases to happen, but i don't think there is one person in america who hopes we have a recession come january 2. and i don't think we will. if this is what comes to pass, massive tax increases, lashing of defense and other spending, we are going to drive the country into another recession. so i don't think the president wants that. he has not shown the leadership that i would've hoped for post election. gerri: the tone seems to be my way or the highway. americans voted for me. and he won the election. >> that's correct. gerri: what kind of bully pulpit to the presidents have? >> the republicans actually publish the budget.

how can you negotiate when the other side doesn't do anything and president obama has offered nothing? i think the american people understand that yes, the president was reelected, but that doesn't mean that he just stays in burma until a decision is reached. you have to be involved and he has to have leadership and he has to show what he would be prepared to do. the house has gone up. gerri: time and again, as i recall. governor pataki, do you so much for coming on the show. always a pleasure. coming up, getting hit hardest from the fiscal cliff. we are teasing the rest of the fiscal cliff. the democrats think they have the edge in talks over the fiscal cliff. is that the case? a political panel is weighing in coming out.

gerri: the notorious gridlock escalating with neither side budging over the fiscal cliff. >> we put revenue on the table. significant spending cuts. >> you can't get more options. gerri: a one-two punch, at the end of the year. will washington ever get its act together and what is at stake? bringing in our all-star panel.

former campaign adviser to john mccain and doug shown also a fox news contributor. >> there might be a last-minute deal to sort of kick the can down the road and do framework for cutting spending and entitlements and tax reform. what i saw last week from the president and the congressional leadership doesn't give me optimism. gerri: i wanted to hear the president what the president had to say where he is traveling today. >> as president i cannot impose my will on congress. the congress of the united states, even though sometimes i wish i could. gerri: that's like i can't impose my will, but i wish i could. >> he has done so before. let's remember obamacare. in control of the white house and the senate. i think john boehner has been the biggest in this, putting

revenue on the table. i do agree with doug and i think that we will get some last-minute deal where we will kick the can down the road. if we go to the fiscal cliff, my party will shoulder the blame. trust me, my party is losing the message game and that is why we are having a bargain right now. >> there is a larger point. bottom line, if we go into some kind of economic downturn or a recession, all sides and all parties. >> i do agree with you.

when the finger-pointing goes down, my party is the one to blame. right now we are trying to put humpty dumpty back together. gerri: to that point, and to both of you, what does the republican party need to do? to change the way it is viewed, we need to do? >> we can't continue to be the party of old white men. we have to work and take control of immigration reform and we have to change our message. we have to stop the fire and brimstone. if you don't vote for us, you are a lazy mood or read it. we feel your pain, we are here with you, stick with us and in the future we will be brighter. we also have to educate the masses on what minted government means going forward. but we need to do is show leadership. gerri: it's going to be interesting to see what works. >> i think it makes a lot of

sense. go for higher rates, come in and say that president obama will go up eight-point or two. but do real and entitlement cuts. >> what i do like his capping deductions at $25,000 or $50,000. it's not time to give into our principles. ththe democrats and president obama need to be willing to show leadership as well. gerri: the fiscal cliff starfish bring me down. that would mean joe biden. he was surveying the damage from hurricane sandy and here's what he said.

>> so the president said we're not going anywhere. we are not going anywhere. you have a homeboy. you have a homeboy in the deal who gets it. gerri: all right, so he's referring to himself. he is not referring to the president. he grew up because he had grown up near the ocean. really? can he elevate the rhetoric? >> his mistakes have been repeated in the legendary. we have to elevate the rhetoric. it is not ideal. >> i agree that he is trying to piggyback a storm to do it. i do think we need to raise the level of rhetoric. we need to show some bipartisanship because we have real problems facing america right now. gerri: a quick prognostication.

will we make the december 31 deadline? >> we are brushing up against the ceiling, so we are back at the table. gerri: you are saying yes, but with caveats? >> yes, we will kick the can down the road. gerri: if you are fired up about this, sending e-mail at gerri@foxbussiness.com. >> coming up, gerri breaks it down next. and more fire and corruption of politics in the middle east. what does it mean for you? also, should you sell your stocks to avoid the looming fiscal cliff?

one expert has advice before you make the trade. next on "the willis report." can i help you?

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gerri: there is no doubt about it. there is a disconnect when it comes to consumers and their view of the economy. today, "the wall street journal" reports ceos are pulling back on spending and expanding and hiring, as we mentioned earlier in the show. half of the nation's 40 train corporations are sinking into

debt. consumers are using their credit cards more and more. spending excesses are becoming more prominent. the national credit card delinquency rate edged higher in the third quarter, while the average credit card debt for bauer jumped 5% from a year ago to almost $5000. that is a lot. main street and wall street, we are living on two different planets. the difference may have something to do with the corporate bean counters that have their eyes fixed on washington as the country comes closer to the fiscal cliff. tax rates spike, extra taxes on dividends from the list goes on and on. the economy is headed into a recession if it's not already there. consumers don't have a crystal ball that is quite revealing. $3500 in taxes per household next year, but as washington knows, there are lots of ways to skin a cat.

someone capitol hill are talking about reducing or eliminating deductions to raise revenue. to be sure, some americans will find that painful. here is to engage with the mouse. take a look at this. california from the average tax deduction for people who do file the itemized form are $33,901. new york, washington dc, connecticut, new jersey. really getting hit hard as well. they have the biggest tax deductions. i know some folks think that if you remove those tax credits and deductions, then we lose the progressivity of the tax code. in other words, they say it would become even more unfair. even after credit to deduction, the taxes of them is still progressive. check out this chart. there is no doubt that american households will get hurt in january, especially small investors. take a look at this, 30,000 to

50,000, he will take a tax hit here. 23% is how much they will go up. we have to figure out the consequences of the fiscal cliff. oil, which is a $2 per barrel, how the ongoing violence in israel and the gaza strip is impacting you and your money. stay with us [ abdul-rashid ] i've been working since i was about 16.

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at your local mercedes-benz dealer. at your local i have obligations. cute tobligations, but obligatio.ing. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. gerri: crude oil prices jumping today between israel escalates. more than 100 people have been killed because of israeli airstrikes. 1400 of them so far. over 1000 rockets have been

fired, hitting schools and homes and businesses. i am joined by phil flynn for the price futures groups and k.t. mcfarland. k.t. mcfarland, let's tart with you. the president says he's trying to broker a cease-fire. is that true? >> yes, but it's not going to happen. henry kissinger says you get a cease-fire 11 or both sides is done fighting. they are not done. iran wants them to keep fighting. they want the israelis to get so involved with each other and fighting each other that no one pays attention to iran. as far as israel, they have a different objective. they have 10,000 missiles in the gaza strip. either by the air or ground troops. gerri: what does this mean for oil markets? anytime anything happens in the middle east, oil sponsored by

going higher. >> impasse. it was showing off like crazy. we will market was changing. we can think about geopolitical risks. we were worried about the economy. i think what happened, it sports trainers to start focusing on the middle east. putting in that geopolitical risk back to the marketplace makes it less likely that it will go down and take out the old lows. gerri: ovoid. what is really at risk from the u.s. point of view? >> i think when no one is paying attention to is the suez canal. 120 miles long. it is one lane with a few passing lanes. it would be very easy for some

group of bad guys to use a rocket propelled grenade and take out a couple of ships. what would that do? it would stop the suez canal and leave a roadblock in the middle, but would jack up insurance rates of anyone trying to stop it. that is going from europe to southeast asia. they have to go all the way around africa to reach it. gerri: it could be that easy? >> yes. the sinai peninsula is sparsely populated. we know al qaeda set up shop there in the last several months. they have border conflicts, and it would be very easy for them to do. gerri: still, what about you? it is a concern of yours? >> it is. about 20% of that is oil.

2% of it is natural gas. it is a major chokepoint. the president of egypt is actually trying to broker a peace deal between hamas and israel. we hear today that the israeli cabinet was voting on a plan with egyptian president lamb. as dangerous as the situation is, i think it at the end of the day, nobody wants a serious war. that is why i think oil traders will think we will pull back it seems like i was more focused today. we took a deep breath as we got through the weekend. i think there is hope that a cease-fire would get back in place. but i think it is tenuous. especially with iran and al

qaeda. gerri: katiemac, what do you think? >> i don't think they want a peace agreement until they knock out the rockets. they want the option of a preemptive strike. had they have they retaliate? unleashing 10,000 missiles against israel in a garage they can defend. that is why so important. gerri: where are oil prices going? >> going higher for the rest of the year. especially if we plan for the fiscal cliff. right now the market is going to start focusing more on the value of the dollar currency. the interesting thing is watching the president is doing.

after hosni mubarak was thrown out, you know, we thought that as soon as he had the opportunity, he would take this and create a big tension. but it seems kind of interesting. right now he seems more interested in gaining power and getting money from the united states. maybe it's because he knows he can't win this or maybe because, you know, there is an associated settlement here. >> mohammed morsi is in a difficult position. if he doesn't look like he's going to do something with his muslim brotherhood brothers, all the radical extremists in egypt, they are going to say what we have is for? gerri: everywhere you look.

thank you so much. great to have both of you on this topic. still to come, what to do with your money as the fiscal cliff gets closer. and this christmas season will have you spending money on gadgets. what are the best technology toys out there? the answers are coming out.

gerri: for forget black friday. great thursday is when retailers are opening door buster deals. here are some of the most sought after devices. christina, welcome to the show. one of the most interesting things i've heard about is that now is the time for apple discounts. you don't see apple discounts very often. >> apple retail stores don't put things on sale as a rule. the only time of year where you will see official apple savings, you can save money off of an ipad or whatever.

gerri: of the big headline. you can never find discount on apple products. and if you can do it, you want to pay attention. what are the hot gadgets? >> is an ipad. i like a bigger budget than my husband. it is a lightweight device that the battery did last forever. gerri: would you recommend it for? >> people who don't have a good tablet. gerri: what else? >> the wii-u. you can play games on your controller. gerri: it looks very complicated. and what else?

>> kindle hd fire. it is a nice alternative to the ipad. gerri: i like them, i think the screen is great. it's great to read a book on. what about the phone's? we have had a lot of phones per year. >> for android, i really like the galaxy s-3. windows phone is also a great model. there is a new know kia lumia. and i like the htc dna droid. gerri: and a 3-d tv? >> it still hasn't taken off, i wouldn't really be hung up on

that. the content is not there. if it's a good price, but i wouldn't buy it just because it's supposed to be 3-d. gerri: any other strategies on chopping? >> are researching now. look at the big websites. start planning out what you want.3 a good thing about this is if you look at the regular price, is it worth going in debt for? gerri: i can't brave the lines. thank you for coming on the show, christina. when you think of the retailers, many of whom have black friday sales, it turns out that target and wal-mart are at the front. they are not always the most successful. the highest sales per square foot include these companies. that is the top five list. number five is michael kors.

he saw his revenue growth jumped 78%. shares have rights more than double since december. more than 250 locations in $1400. that's astounding. number four is the company of coach. the most of any store on the list, 16 growth from last year. the share prices price is down more than 11%. number three is a canadian sports apparel company. share prices up nearly 50% year-to-date. lululemon. and the next is tiffany and company. and the stock down about 7% year-to-date.

the number-one most successful retail store in the united states is apple. this tech giant seems to be the most on everyone's list. sales per square foot, $6000. that has made apple the largest traded company with a market capital of around $500 billion. unbelievable. still to come, my "two cents more". and it should be sell your stock people really lo snapshot from progressive,

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gerri: a fox business alert for

you. the twinkie may not be dead after all. hostess brands are being forced by a bankruptcy judge intermediationn meaning the company is not going out of business, not yet. last week, hostess sold out all its assets after a huge strike. 18,000 jobs that could be lost will be held in a hearing tomorrow afternoon. stocks rallying today. big-time. a deal that could be reached before the end of the year, take a look at the dow jones. soaring more than 200 points. to be fair, what a lot of questions about where the market will go. with all the ups and downs, should you sell your stocks were for the fiscal cliff kicks in? joining me now is rob morgan. welcome back to the show. you are an internal bowl. i think that you would hold through all kinds of devastation is this something that makes you think that once lighten up a little bit?

>> well, we have known about the fiscal cliff for a couple of years now. i have been steadfast we are going to reach a compromise here. gerri: where does your optimism come from? we have known about for a long time, but there's been no solution. >> the president wants higher tax revenues, not rates. speaker boehner has said we can do that. the question is why didn't we do that now? the president doesn't have a next election. gerri: one of the economists, i

believe, believes that stocks will take a percent. largely on the basis of the fiscal cliff. this goes not just at income, because honestly income taxes will rise dramatically, but it also taxes income from dividends. all major streams of revenue get attacked we fall off the fiscal cliff. would you say? >> once again, everything is hearty baked into the pie. his target 1575 for the s&p, which is 16% higher than it is right now. mine is the mayor 1550. he is more bullish. stocks of a percent, down 8% -- >> what would you tell people who have been through 2006,

2007, 2008. seeing portfolios devastated, they worry it could happen again. should they do anything to protect themselves? >> it will continue to be a choppy market. >> stocks are going to get hit here. >> keep in mind that if they are multinationals, those of u.s. companies that can sell into the emerging economy. it is not merely the dividends you are talking about, it's real growth in earnings. the dividends help prop up the stock in a sideways market. gerri: anything you should sell? >> i am not liking energy and telecom by now. those are my underweight. gerri: okay, thank you for coming on tonight, the eternal optimist. >> thank you. >> all right, we will be right

be right back. the answer the question of the day. four years from now, will america be better or worse? in my 2 cents on the highways of massachusetts. find out what happened to the woman in charge. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investorare saying... [ all ] i'm with scottrade.

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we asked on gerriwillis.com. 1% said better, 99% said worse. here are some of your e-mails in response to election day. jim from michigan says i hope republicans just say no more charitable deductions, reduce spending and let things go down the toilet. let joe biden give more than his nine tenths of a percent. i say if you do not pay federal income tax is, you cannot vote. thomas agrees. the american dream is gone, so get ready for texas who never would have dreamed for. environmental control, higher energy costs and shortages. loss of personal liberty and a guarantee for nuclear proliferation. revision of the u.s. constitution and unheard-of lowering of american prestige worldwide. i'm in the first time i this herbal years ashamed of the american electorate. and the u.s. was voted for politician assistance to still

decide. love hearing from you. send us e-mails. and finally, talk about ironic. the director has been reassigned. not being safe on the highways. let's go after "the boston globe" reported on her driving record which included seven accidents, for speeding tickets and not wearing a seatbelt. she has been on medical leave since the latest accident back in august. her license status was nonrenewable for not paying local taxes. she had no public safety transportation or administration background so how did she get the job? she worked for two decades as a consultant for the democratic party. which is probably why she's getting reassigned and not fired. that is my two cents more. crazy. coming up tomorrow barreling toward the fiscal cliff i will be joined by one of the smartest money men in washington.